HMB settlement gives Keenan 129 houses on Beachwood and Glencree—and more

Updated

Posted by on Tue, April 1, 2008

Barry Parr
Beachwood and Glencree on March 22. Check it out while you can. The city has agreed to fence the entire property off.
Cheri Parr
John Knox, with the city's law firm Orrick, Herrington & Sutcliffe announces the settlement agreement.

Developer Charles "Chop" Keenan will be allowed to build 129 new houses on Beachwood and the adjacent Glencree property [pdf of city’s press release] as part of a settlement agreement with the city over the Beachwood lawsuit. This returns the two properties to their planned development states in 1990, and gives Keenan the right to 46 houses beyond Beachwood’s original size of 83.

The settlement is dependent on the passage of AB 1991, which will exempt the development from state and local review, including (presumably) the Coastal Act. The bill is sponsored by assemblyman Gene Mullin and senator Leland Yee.

The city will also put a stoplight at Bayview, which will be paid for by the developer. The cost could be shared with future developments that use Bayview for access.  The city says that this "would also facilitate access to other new developments". This opens the door for the reconfiguration of Pacific Ridge to enable the building of the Foothill Bypass from Highway 1 to Highway 92.

The development will not be subject to the growth limitations of the city’s Measure A, which limits growth in Half Moon Bay to 3% per year.

Keenan will pay the city $2.25 million to offset the city’s costs and for the development rights.  If the legislation fails and the development rights are not granted, the city will owe the Keenan family trusts $18 million.

The city council approved the settlement with a vote of 4 to 1. Council member Jim Grady voted against.

UPDATE: You can download the settlement agreement from Coastsider.


What? Leland Yee and Gene Mullin are going to pass a bill that overrides the Coastal Act? A widely-supported, statewide environmental law is going to be abrogated to broker an expoitive deal that wil make millions for a developer? Mullin and Yee should be ashamed of themselves. They should start putting an (R) after their names.

Kevin,

I resemble that remark!  In light of the settlement: Let’s focus on lawyer-bashing rather than Realtor-bashing.

Agent Skinner

Steve, What I meant was R = Republican.

I stand corrected.  And here I thought you were referring the trademarked brand of the National Association of Realtors ;-)

And if the legislature doesn’t subvert the Coastal Act, HMB owes Chop $18 million.

Anybody remember “Blazing Saddles”, where Cleavon Little holds a gun to his own head and threatens:  “Hold it. The next man makes a move, the n——- gets it!”?

Well, now that you brought up the NAR…

http://en.wikipedia.org/wiki/David_Lereah

But I digress. Yee and Mullin are the real bad guys here. The local polticos who agreed to this ripoff settlement are just clueless. Yee and Mullin know very well what they are doing.

“Yee and Mullin are the real bad guys here. The local polticos who agreed to this ripoff settlement are just clueless. Yee and Mullin know very well what they are doing.”

Got to disagree, Kevin. “Saving the city” and sliding all this in on greased skids is a big win for the pro-development HMB City Council. And you know better than I the chilling effect this will have on trying to uphold growth limitations, the HMB LCP, and the Coastal Act on other properties in the city. It’s a classic Old Guard win. And let’s not forget this is what the voters of HMB said they wanted when they put in this City Council.

Whatever makes you think a “D” after someone’s name means they are good for the built or unbuilt environment?

With Migden’s personal problems already working against her and Yee stumbling on this environmental sell-out, it could get more interesting if Nation or a conservationist Republican in the mold of Mel Lane can spin it into a campaign issue.

I’m a long-time conservative Republican and I’m deeply dismayed by the contempt that the California Republican Party holds for environmental laws and the Coastal Commission in particular. They fail to recognize that others like me can find fiscally and socially conservatives Democrats to support, but nary an environmentally conservative Republican. As a result, their power and influence in the state will continue to wane, thereby offering more opportunities for Democrats to feed at the trough of developers. Sigh.

Time to investigate AB1991 and alert other coastal activists.

This is outrageous.  Leland Yee and Gene Mullin should be ashamed of themselves.

I feel sorry for anyone who’s either trying to maintain their property values, or is trying to sell.

Did our enlightened state representatives and HMB City Council even think to require the use of local workers or local contractors for the work?

Maybe what comes out of all this is a T-shirt: “My elected representatives sold us out to a developer, and all we got was a lousy bypass.”

I’m bracing myself for gridlock at 92 & 1.

Barry,

You forgot: “Ooh, baby, you are so talented! And they are so DUMB! ” - from the next scene -

Doesn’t anyone remember who approved the original discretionary VTM, creating the liability for the City?

Ken Johnson

P.S. Back to the effort of dating whether the recession began in the 3rd or 4th quarter last year and head scratching over Federal Reserve Chairman Bernanke warning to Congress: “a recession is possible.”  <DUH!>

Even though the Godmother. Dolores Mullins, died in the mid-nineties her sphere of influence is still with us. Why?

Assemblyman Gene Mullin, sponsor of AB 1991, is her godson.

She still speaks from the grave.

John Lynch

Can someone please tell me how former City Attorney Adam Lindgren, and hired guns Orrick, Herrington & Sutcliffe, figure in this settlement?  Who was representing the City of HMB in the negotiations?

Is Lindgren’s resignation related in any way to the deal?

Is this constitutional??

Something stinks here.

Orrick was hired for the appeal, on the reasoning that Adam’s firm lost the case.

Adam’s apparently moving out of the area, but there’s a lot more backstory, both known and unknown.

Despite the assurances otherwise, the proposed legislation sets a dangerous precedent. I see more bills coming down the line every time a developer has problems getting around environmental regulations. If you feel the same way, I urge you to contact your state representatives in oposition to AB1991.

Actually, circumstantial evidence suggests that Orrick was hired for their ability not only to handle an appeal, but also to get the laws changed.

I cannot judge nor predict whether the 129 houses will ultimately all be found permittable and built, but that’s clearly the openly-stated intent of this settlement at first blush.

I can understand why the same people who approved the developments decades ago - who again dominate the City Council today - would want to settle in this manner.

What I do not yet understand is why the alternative if the laws are not successfully waived is paying $18 million, though.  If - for reasons beyond Half Moon Bay’s control - the laws are not changed or waived to allow the 129 house, the matter should be allowed to go back to appeals court.  The City will no more be able to pay $18 million than it could $41 million, and the City will again face bankruptcy.  Just as previous Court actions were put on hold in the past, it seems to me that this one should simply be put on hold, and not dismissed, until we find out whether the attempted “escape clauses” actually work out for both parties.

Perhaps Mr. Knox and/or the four who voted for this $18 million commitment can address my opinion.

Hal M. Bogner
Half Moon Bay

“Even though the Godmother. Dolores Mullins, died in the mid-nineties her sphere of influence is still with us. Why?
“Assemblyman Gene Mullin, sponsor of AB 1991, is her godson.”
....
John Lynch

And, John, do you recall who was selected by her gang to replace her on the HMB City Council?

Six degrees? We don’t need no stinking six degrees to make connections.

Carl May

Ken, do you mean city council or city staff?

“I’m a long-time conservative Republican and I’m deeply dismayed by the contempt that the California Republican Party holds for environmental laws and the Coastal Commission in particular. They fail to recognize that others like me can find fiscally and socially conservatives Democrats to support, but nary an environmentally conservative Republican.”

Pete McCloskey said something similar recently when he helped a Democratic candidate for the House and then announced he was going to register as a Democrat after being a life-long Republican. Wish he hadn’t done that. His kind of integrity makes for a great independent. Or a potential founder of the Realist Party.

Carl May

Suzy,

The City Council, they approved the original discretionary VTM. My recollection is of a current relevant commonality.

Sorry I didn’t make that clear.

Ken Johnson

Can two opposing parties make a legal agreement that breaks existing laws?

They can if they make it dependent on the legislature subverting those laws.

If the legislature doesn’t give Keenan power to go around the Coastal Commission, Department of Fish & Game, and God knows what other state agencies, then according to the settlement, the city owes him $18 million.

$18 million + 6% Interest till paid.

Ken Johnson

I’m very confused by all this.

Brinkmanship and poor decision making over decades has caused this issue to spin hopelessly out of control.  To me “the settlement” appears to be little more than taking the whole issue to the next level.  The options now appear to the City of HMB pays Keenan $18 million(which would cause bankruptcy anyway) or the citizens of the State of California will have diminished access to their coast with 129 new homes AND the existing the growth rates in HMB and unincorporated MidCoast.  I thought the Coastal Commission had issues with coastal access based on the Highway 92 and 1 traffic flow and the current improvements under construction at 92 and 1 weren’t going to improve traffic flow that significantly.  With the Terrace traffic light, the Beachwood light and probably the bypass light on 92 all on the agenda, would whatever traffic flow gains the current 92 and 1 intersection work achieves be wiped out?  Has any of this been studied?  Is this just a taxpayer funded infrastructure grab by some North HMB developers?  Is the Legislature going to go around the Coastal Commission on some trumped up emergency action to save The City Of HMB from their own mistakes?  Did Yee and Mullins made their offer of legislative help, knowing this was going to be the settlement?

Is it just me or is HMB already bankrupt, morally bankrupt with this “deal”. Selling out local and state review of the project, rolling back the development status to what it was nearly twenty years ago and ignoring voter approved limits on development, all for a paltry 2.25 million dollars. If there’s any value to this settlement for current residents, other than pretending development and legal issues don’t exist, could someone please explain it to me.

This settlement is a welcomed relief to many and ends the short-lived nightmare facing HMB.

I know there are many who feel that the City folded but this settlement probably reflects how poorly they thought of their case in the first place.

And playing out for years a loosing hand is only going to make the settlement bigger.

As far as why Keenhan got more homes,  its probably cause HMB damaged him.  It will also be interesting to see if the State actually passes these new laws to save HMB.  Personally,  I am doubtful about this happening.

For all of those who don’t want to see what will really be 250 new large homes (Beachwood, Pacific Ridge and Ocean Colony,  relax cause it will take 5-7 years of construction to absorb that many expensive $1.5-$2 million homes. 

There really isn’t or ever has been that strong a demand for people to move here in large numbers.  The low level of homes sales have born that out for many years.

Hopefully,  the loss of this lawsuit plus Pacific Ridge and years of litigation on N. Wavecrest will be a wake up call to the people here that you can’t sue everybody.

The sad reality of HMB is that they are out gunned by big time developers that have deep pockets and can bury a small little town.  And this really shouldn’t be a surprise to anyone cause its been obvious for years.

So now instead of spending 10-15% of the HMB budget on lawyers,  we can use that money to pay off the bond.

Vince,

‘Foothill Blvd’ would have ZERO positive impact for traffic, except for those using it as immediate access to the newly created housing.

I would have preferred that the appeal had gone forward, but OHRS has done a nice job in preserving some options. As I read the Agreement last night, the Net Present Value is potentially significantly less than $18 mil.

The City has roughly a year, 30 June 2009, to complete actions at a local and State level to enable development. There is roughly a two and a half year additional window to allow for the ‘potential’ of Federal delays and litigation delays on a day for day allowance for which the City has ‘no control’. The ‘drop dead’ date then becomes 31 December 2011 when $18 mill (without interest) is due, if all goes ‘wrong’ - depending upon your point of view.

Please note that there is a majority of the seats on the City Council up in November 2009.

I can construction a scenario in which the settlement is not nearly as bad as initially envisioned - not as good as the appeal, but hey!

The anticipated cost is less than that would be wasted in fuel burnt waiting at a traffic light at ‘Foothill Blvd’ and SR 92!

Ken Johnson

Steven and Ken,

Thanks for your perspectives.  I take away from them, the current settlement is not as clear cut as $18M or 129 homes on the fast track.  That there are a lot of economic forces and big political players that have not been factored in or consulted yet.  So, the controversy shifts from negotiations between The City and Keenan concurrent with a multi year Federal appeal to a year long legislative action concerning saving The City of HMB from bankruptcy, the role of the State in bailouts of cities, the intent of the Coastal Act and where the Coastal Commission is at politically these days.  The revised SMC LCP is also before the Coastal Commission.  With a year plus time frame, the HMB citizens have options of recalling members of the present City Council or electing a new majority in November 2009.

I had no illusions about the “Foothill Scenic Bypass” improving the traffic flow North of 92.


Barry,

Thanks for asking Senator Yee’s about his position on the settlement and AB 1991.


Today’s S. F. Chronicle had an editorial cartoon:

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/04/04/EDRUSSELL.DTL

The cartoonist missed how consensual the City Council majority has been, to date, to the position they now find themselves in.

Let’s put some names on the people in the cartoon that Vince linked to above, shall we? From left to right, we have McClung, Muller, Fraser, and Patridge—-four who will go down in the history of HMB as completely selling out. Only person missing from the cartoon is Assemblyman Gene Mullin, who is the guy doing the dirty work for developer Keenan (the guy standing on the chair).

After having read through the documents, it is starting to sink in just how monumentally bad this so-called “settlement” is for HMB citizens.

Let’s review what we are looking at:

1. The City grants the developer the right to build 129 houses on 2 parcels, whereas the original lawsuit was about building 83 houses on only 1 parcel.

2. The City promises to persuade state Assemblyman Gene Mullin to use his influence to change numerous environmental laws so that the developer can build houses on top of wetlands—something that is totally illegal everywhere else in California.

3. The City withdraws its appeal of Judge Walker’s unfair judgement after having spent hundreds of thousands of dollars for a lawyer (John Knox) to prepare that appeal, and after having Mr. Knox himself tell HMB citizens at a public meeting that the City’s case for overturning Walker’s judgement on appeal was “very strong.”

4. If, for any reason, the City fails to convince Gene Mullin and the rest of the state legislature to enact the insane legislation mentioned in #2 above, the City must pay the developer $18 million in cash.

This is a settlement? I swear my 5-year old could have negotiated something better. This is not a settlement. It is a complete and total sell-out by 4 local politicians who are in the pocket of the developer: Muller, Patridge, Fraser, and McClung. The fact the first two were born and raised here reveals how little they seem to actually care about protecting the character of the place where they grew up.

The Chronicle cartoon got it exactly right:

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/04/04/EDRUSSELL.DTL

I think you have to look at the deal the City made as a realistic assessment of their case and their take on the outcome should they have decided to continue on with the multi-year appeal.

I know many people are horrified that someone can build a home or series of homes on sacred wetlands.  But let’s look at this property objectively.  Its a big flat infill lot fronting HWY 1 that is sandwiched between 2 neighborhoods a few hundred yards from a McDonalds.  This is a far cry from something like the Pescadero Marsh.

And as far as lawyering goes,  Mr. Keenan’s attorney has proved againthat they get good results at a good price.

Kevin,

When I first clicked on the cartoon referenced by Vince, I was inspired to re-do the City seal. During a misspent education, we translated many ‘common use phrases’ to Latin - our instructor was not amused. I also had a picture in mind for the centre of a new City seal.  Discretion won out - even without a change to the centre, reaching an easy translation of the Latin ‘Asinus’ would probably be a too rapid giveaway.

Presumably, without evidence to the contrary, the City has complied with the five court days it had to withdraw the Appeal of the Judgment and The Agreement is binding, at first blush. All are left to continue to assess or be amazed by the scope and ramifications of the agreement.

The voters and property owners in Half Moon Bay are now left to digest the Agreement, what it will mean, and the probability of not only California but also Federal and court agreement with the terms. Then assess the options and costs associated with the options. 

Ken Johnson

Steve, this deal could have been a lot more palatable if the city had simply stuck to Beachwood. Depending on the details, I might have been willing to support it.

But it’s a huge problem to waive the environmental review process for Glencree—which hasn’t been examined at all in recent memory.

That and the $18 million poison pill could make this deal unsellable in Sacramento.

If I were Gene Mullin, I’d feel like I’d been had by the HMB city council. How enthusiastic do you think he is about twisting arms to pass AB1991 right now?

Even before Yee did his John Kerry flip-flop,  I had my doubts about this bill flying.  It would be cheaper than borrowing money.  We’ll all just have to wait and see how this plays out.

My guess on the larger number of homes granted was that the City was at fault and had to remedy Mr. Keenan.  Plus with the wetlands on his property,  how could he get his 83 homes? 

And for those who feel $18 million is too much,  a loss in court would have been closer to $50 million with interest and attorney fees.

$18 million may the right number for a dollar settlement. Without knowing the likelihood and cost of various outcomes, it’s hard to say. 

It puts the probability of completely overturning the decision somewhere around 50% (depending how you estimate and allocate attorney fees), so it may not be an unreasonable amount.

That’s not the issue. The issue is that the settlement precludes an appeal or further negotiation if AB1991 fails to pass. That’s extortion. Under the circumstances, Messrs. Yee and Mullin are within their rights to reconsider their support of the settlement, which is probably not what was described to them before April Fool’s Day.

The City has to have had an estimate of the likelihood of passing the bill.

And as far as the City dropping the appeal goes,  they can’t have a settlement agreement and keep the appeal option open.  Either you settle or you sue.

There was plenty of time to wait for the legislation to be passed, or not. Dropping the appeal and swallowing an $18,000,000 poison pill without waiting is incomprehensible.

Steven,

We agree on the likelihood of the passage of the proposed legislation as “doubtful” as you wrote on 3 Apr. I might also presume that most relevant parties probably held similar presumptions - certainly Mr. Keenan.

So, we are now left with a variation of the old story - ‘it is not a question what it is, only about the price’! [PG Rating Version]

Now, Mr. Keenan may just be just a good guy looking out for the City and cutting his price to a half or as you conjecture by two-thirds. But, as a Dad, I know I wouldn’t be that benevolent with one of my kids trust funds.

I always try to put myself on the other side of the table. I might be concerned to find OHRS representing the other side - maybe not. But the most weight would be having a judgment in hand that was higher than could have been possibly imagined and weighing the probability of an appeal cutting the punitive amounts. Punitive ammounts are frequently cut on appeal even if the essence is left intact.

You also presume that the legal fees were wholly funded by Mr. Keenan and that there were no other parties of interest. Interesting presumption. I can think of those who might believe a ‘brush back’ of this size in hand worth it.

We have an agreement, that was contingent upon someone else acting, someone who was not a party to the agreement. I would hold, in that case, that putting an appeal on hold until that action occurred not an unusual or unreasonable request - if all parties saw that action, the legislation, relevant to the settlement. Ergo, few believe that the legislation will pass and certainly not survive legal purview.

We are back to ‘it is not a question what it is, only about the price’! [PG Rating Version]

At the appropriate time, I am certain there will be many extracting the elements in the Judgment that would have fallen during an appeal. I don’t envy those that voted for the Agreement and want to seek reelection. Only time will tell.

Ken Johnson

The way I see it is that the City agreed to give Mr. Keenan 129 building permits by a certain date by having a state law passed or pay him a cash settlement of $18 million by a date further in the future.

This settlement was predicated on stopping all litigation. 

I think the options facing HMB were between bad and worse.  At least with this settlement,  there will be a few years grace period before they have to start paying for this.

Steve, since you are a REaltor, maybe you can offer your opinion on this scenario: What if AB 1991 goes down in flames because most state legislators see it as the abomination it is? 

How might you explain to prospective home buyers that our current City Council sold the City down the river for $18 million by withdrawing their appeal unconditionally? Are you required to disclose that the “settlement agreement” signed by Naomi Patridge & Co. has severely crippled the ability of the City to provide services for the next, say, 30 years?
 
Actually, I believe one of your local colleagues has recently commented on this point. He said:
 
“Should the city go bankrupt, as REALTORS, we will most likely have to disclose it. But, in the meantime, we are not and we will just hope for the best and hope that this certain property owner gets what he wants…the opportunity to build.”

http://www.trulia.com/voices/Market_Conditions/Half_Moon_Bay_may_go_bankrupt_Without_city_servic-16408—
 
Well, Keenan and the Realtors got what they wanted.

“...Should the city go bankrupt, as REALTORS, we will most likely have to disclose it.”

Gee, do ya think?

I know the real estate community has been very concerned with the City’s judgment.  I can’t speak what statements other brokers make but I disclose this problem to every prospective buyer.

Up until last week,  I made the letter from the Mayor about this as a disclosure item.  I’ll disclose the new settlement although I may leave out the cartoon.

The good thing about this being resolved,  sort of,  is that the uncertainty is over.  People can make informed decisions about what’s known.  Having the appeal drag on for years could have potentially impacted the property values during that period.

Its really hard to tell what the full impact would be because this is somewhat unchartered territory.  I think the best you could say or hope for is that it would be neutral.

Steven,

I think we agree that their is / was “bad and worse” options; we might disagree whether the Settlement Agreement is ‘The Bad, The Worse or The Ugly’ [with respect and credit to the Clint Eastwood movie] 

The City Four gave up the Appeal option! They committed us to paying $18,000,000! What is yet known is whether they are going to act to make it due on 30 June 2009 or act in a manner which delays it until 31 December 2011.

What, in their actions, makes you believe that “there will be a few years grace period”?

Ken Johnson

P.S. Did anyone else just finish watching KQED’s broadcast of “Leon Panetta Lectures:
Economic Challenges at Home and Abroad”?

I’m not an attorney.  I read the agreement.  This settlement agreement entered into by the present HMB City Council majority is predicated on that majority convincing the State and Federal Government and any individual or group that might sue to go along with AB1991 and not bring a suit which ties the Beachwood and Glencree developments up in court.  It’s beginning to sound like the consensus here is this is not likely to happen.

The citizens of HMB could not participate in the current City Council’s negotiations with Keenan.  But, there is an agreement now which gives the citizens of HMB time to act and several options.  If the citizens agree with the consensus here, that the City Council majority’s getting AB1991 to pass and signed into law by the Governor by June 30, 2009 or the Feds acceptance and any lawsuits cleared up by December 31, 2011 is not likely, then how do they deal with the $18M default?  I go back to what the City’s attorneys and financial specialists said in the public meetings.  To deal with the $18M commitment there is a possibility of a bond financed by a new property tax approved by 2/3 of the voters or reducing the City budget to fund a bond out of general revenues or to have this Council or a new Council restructure the City’s debts including the $18M.  Based on what I heard the City’s attorneys say about restructuring, if that option were to be selected or threatened, I’d speculate Keenan would be willing to negotiate again with that future Council rather than risk what a bankruptcy judge would grant him.

Go back to Barry’s reference above to Cleavon Little’s character in “Blazing Saddles”.

This is sounding more like a roughly one year (depending on events) timeout for the attorneys.

Anyone want to place a bet on whether the city council’s proposed increase in Transient Occupancy (hotel) Tax will pass in the June 3 election if the fate of AB1991 is still up in the air during the election?

Maybe the 4 wanted to lock in the 129 houses just in case they don’t get re-elected, to make sure that a future city council can’t stop the houses?  I think that’s a key reason for the $18M poison pill.

I’m still trying to understand how giving the developer everything he wanted and more is a negotiated settlement.  What tangibles does the city get from this settlement?  A relatively piddly amount of money (the net profit from 3-5 of those houses) that might cover most of the city’s near-term costs when the houses are built?

One reason that HMB is in bad financial condition and always getting worse is that houses, starting a few years after they’re built, are a net revenue loss because the required municipal services for a house cost more to provide than a city receives in property tax from that house.  That’s why well-run cities fight for revenue-generating businesses.

In Steve Hyman’s Apr 7 1:21 comment he wrote “My guess on the larger number of homes granted was that the City was at fault and had to remedy Mr. Keenan.  Plus with the wetlands on his property, how could he get his 83 homes?”

Wait a second here.  My understanding of the special legislation is that it overrules environmental laws and allows all 83 houses to built even on known wetlands.  Please explain in what reality you think all 83 houses won’t be built at Beachwood, plus the Glencree addition?

Steven,

My compliments for the manner of handling disclosure…although the Cartoon is my favorite part of the Settlement Agreement.

Vince,
More like watching AB 1991 flameout over the next 30 or so days.

Barry,
Well, it just may change me - OMG - into voting for a Tax!

Ken Johnson

Ken,

The momentum may flame out in thirty days.  But, how much effort would it take to keep AB1991 on legislative life support for a year to buy some time for a city facing bankruptcy?

Everyone,

If the city defaults and has to pay the $18M, it would take ownership of the Beachwood property. A previous Council had approved 19 homes on the property without violating any environmental laws.

I would expect that the city could sell those 19 lots for at least $5M and reduce the debt substantially.

Dennis Paull

Dennis,

Thanks - a balancing multi-million dollar valuable asset to the City:

“A previous Council had approved 19 homes on the property without violating any environmental laws.”
I missed that.

Vince,
A Bill or its contents can by comparison make ‘Freddy Krueger’ appear to be a frail vulnerable short-lived character. Unfortunately, please read P A(2)(a):(b) - if not enacted, the Bill is not helpful on a timeline. OTOH, it is cheaper to file against the City. Hmm. And the Agreement is silent on a definition of a reasonable defense and consequences, save P B(3).

Leonard,
Correct, residential development in general costs more in services than the tax revenue received - that is why Measure A limitations applied only to residential development.

Also correct about the number of units at Beachwood, the Agreement requires “conformance with the [original] VTMs”.

Ken Johnson

Yes, it’s true—if HMB pays the $18M, it owns the property.

Selling a small number of lots for development would reduce the debt.

Another option would be to dedicate the land to agricultural use—either by leasing it to nearby farmers, or by partitioning it for community or individual gardens.  With rapidly rising food & energy prices, growing food locally is a more attractive use of the land, especially from a financial standpoint.  As long as enough money can be made to make a dent in the monthly payments…

—Dan

In the second week of September, 2001, the Coastal Commission reduced the quantity from 83 to 19 due to the extensive wetlands found on the site - several of which were not connected to the ones Judge Walker construed as being the Cities responsibility. Why Walker had no curiosity about those is an interesting question.

In the event that the proposed state law isn’t passed,  the City should consider selling some of their assets to minimize the amount of money they will need to borrow.

If the Beachwood parcel includes water connections,  they are worth their weight in gold.  Going price for a water connection alone is around $40,000+

It probably wouldn’t be a bad idea to develop a contingency plan in the event the law isn’t passed so these assets can be hold in an orderly manner and get top dollar.

Raw land isn’t the easiest thing to sell these days so the more time one has to market it,  the better the price.

Sorry, Steve.  That sounds too much like the GOP / NeoCon agenda:

1. Spend money like crazy. Empty the Treasury, and transfer the People’s wealth to corporations and political supporters.

2. Lower taxes so that U.S., state, & local governments are starved for funds, even to meet the obligations of employees and bondholders.

3. Then have those same corporations buy up the public resources (land, water, infrastructure) at fire-sale prices so that state & local governments have some cash to make payments & provide bare-bones services.

This is what’s been happening at the federal level for decades, and now it’s hitting HMB.  It’s a land, resource, and power grab by the private sector over the collapsing public sector.

This is all a part of GOP strategist Grover Norquist’s “Starve the Beast” plan.  In his own words:

“I don’t want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub.”

That’s just nuts.

Government is only the enemy if we choose it to be so.  In fact, governments can be very good at a lot of things—building roads & infrastructure, preserving the environment, regulating businesses so they don’t screw, harm, or kill people (FDA, SEC, FAA, etc.), providing services like water, sewer, police & fire protection, etc.

Anyone who elects officials who have the intention of reducing the power & wealth of the governments they serve is insane.  “Let’s pool our tax money, so that our elected officials can give it away to their friends!”

It’s heartbreaking to watch it all unfold.  That’s why I refuse to sit & watch.  It’s time to take action.

Write to Gene Mullin and let him know that we refuse to support AB 1991.  It’s a giveaway of public resources and treasure.

The coastside is a great place to live because We The People decided to protect it from overdevelopment.  That’s still the case, despite all the political and financial pressures to the contrary.  AB 1991 is just a backhanded attempt at diminishing important coastal protections.  I’m not buying it.

I know its so easy to blame all our problems on George Bush, Dick Cheeney and Ronald Regan but to be honest you don’t have to look any further than Main Street HMB for the mess we are in.

Dan,  I really think you hit the nail on the head with your comment of “Spend money like crazy. Empty the Treasury and transfer the People’s wealth to corporations”.

With the advice of lawyers and anti-growth supporters,  that’s exactly what our City Council did. We have foolishly wasted millions of dollars on frivilous lawsuits.  We are broke.  And worst of all,  the City now owes only $18 million to an evil DEVELOPER who wanted to ravage a beautiful wetlands full of red-legged frogs to put up million dollar homes.

I know this valuable property is worth saving.  There aren’t many wetlands left anymore near a McDonalds and Starbucks.

But seriously,  look at the mess we are in and will be paying for for decades to come.  I’m sure our leaders won’t make this mistake again.  And one reason is that they won’t have the money to waste on lawyers since they will be paying it out on a settlement.

Hi Steve et al,

It was the judge that caused the city to be in debt to Keenan. It was not the city’s fault. Let’s not go blaming the Council for the unsupportable conclusions of Judge Walker.

Walker choose to ignore all the arguments and evidence presented by the city’s legal team and he choose to accept all of Keenan’s team’s illogic. The verdict was only about whether the city CAUSED the wetlands to develop on supposedly otherwise perfectly buildable land.

Which of the folks who have lived here since before 1984 think that there were no wetlands on the Beachwood property until after the city constructed a drainage project for the Terrace development? And who thinks that Keenan didn’t know all about the wetlands when he bought the property for a paltry $1M?

I wasn’t here until 2001 so folks who have a long history in town will need to chime in.

Dennis Paull

Hi Dennis,

I guess we see things a little differently. The judge didn’t cause HMB’s problems, the City did this to themselves.

The City thought enough of the judge’s ruling that they decided to settle the lawsuit rather than appeal it.  That probably makes the judge more right than wrong.

And for your other question.  I’ve lived here now for over 25 years and I’ve seen a lot of changes.  Many new neighborhoods were created during that time.  I would expect that all these neighborhoods would be challenged as wetlands and red frog habitats today.  Alsace Loraine would be fought tooth and nail today, for example.

To me, Beachwood has always looked like the same old unattractive, unkept in-fill lot sandwiched between 2 older neighborhoods and near a McDonalds as when I moved here then.  It doesn’t even look as nice as the 2 farm fields to the north.

Its kind of tragic to see the City loose so much money over such an unimpressive piece of property.  Doesn’t seem worth the fight and money.  Not to mention wasting everyone’s time dragging on this process for the past 20 years and 20 years to come.

“Which of the folks who have lived here since before 1984 think that there were no wetlands on the Beachwood property until after the city constructed a drainage project for the Terrace development?”

Dennis,

This is exactly what has some of us giggling in the background—gotta keep it in the background because the potential consequences are real and serious for more recently arrived people who had no part in creating the problem.

Bottom line: The property was DRAINED for development in those heady days of the early 80’s, a time when the City of Half Moon Bay was still coming to grips with the need to give at least an appearance of complying with the requirements of the Coastal Act. It wasn’t dust they were draining. But they botched the job and some of the water hanged around during ensuing wet periods and formed new wetlands.

(And, yes, other wetlands in Half Moon Bay and the midcoast were also drained and/or filled for residential development in that era. A particularly irritating one for me was a little marsh off of Roosevelt, near where I had an office at the time.)

Carl May

Steve Hyman wrote:

“The City [Council] thought enough of the judge’s ruling that they decided to settle the lawsuit rather than appeal it.”

Actually no. The City Council didn’t think about anything before they decided to settle—-they just did what the developer Keenan, who owns them, told them to do.

Why else would they settle for more houses than the original lawsuit was ever about?

Why else would they ok the idea of building 129 houses not just on top of man-made wetlands (if there are any, as Carl notes) but also on top of natural wetlands that always existed on these two parcels?

Why else would they drop their appeal after already having paid a top-notch lawyer hundreds of thousands of dollars to prepare and submit it to the 9th Circuit?

The answer is very simple. Because Muller, Patridge, Fraser and McClung care more about the developer’s interests than about the interests of the citizens they are supposed to represent.

And Assemblyman Gene Mullin cares more about doing political favors than about standing up for his principles.

I sense the frustration of many here who whould rather have seen the City Council fight this lawsuit all the way to the Supreme Court,  costing HMB $50 million + and spending the next 10 years making lawyers rich.

As someone who deals with negotiations all the time,  its interesting to see how things play out.  I could envision at the first meeting the City telling Keenan that we won’t pay you a dime.  And he responded by saying you owe me $40 million now and it will be $50 million in 3 years.  And since the City is paying his legal bills and he had the judgement,  he was in the driver’s seat.

How the City ended up giving him more permits than he would have gotten gets back to the City’s assessment of their case.  Maybe Keenhan said I’ll settle for 200 homes and your land and they finally came to this compramise.

Its cheaper for the City to give up permits and get tax revenue than writing a check for $18 million.

I wish people would stop carrying on about this sacred wetlands.  Its an unattractive infill lot on HWY 1 by a McDonalds surrounded by older homes.

This has been an expensive lesson that HMB won’t forget.  After all POST bought N. Wavecrest,  which was much larger,  for less money.  And since the City will be paying off this debt for decades,  they will constantly ber reminded how their limited budget is being wasted paying off frivilous lawsuits instead of improving the services they offer their citizens.

Steven,

Is there some reason you don’t reference the “City Council of 1990”, that voted to approve the Discretionary Vesting Tentative Map (VTM) for Beachwood in 1990, with full knowledge of a forthcoming moratorium, which is the subject of the Settlement Agreement and AB 1991 as currently written? A “City” doesn’t make a decision. A “City Council”, with named individuals, makes a decision by a vote. That vote is on record. It is that vote, that created an explicit definition; a definition wrongly the base, argued and accepted, for a question of a Fifth Amendment taking, that Mr. Keenan wishes to return to in the Settlement Agreement.

When you wrote of “the advice of lawyers and anti-growth supporters” at that time, I presume you are referring to me among others. I have been reticent to go on about it, but I am on the record of that time. I had advised the City Council, on the record, that the “Sewer Allocation Plan” that they had was inadequate for the shortage of sewer, water and road capacity. I advised them to adopt a “Growth Management Plan” of 3% per annum - a question of time not a taking. I was an author and one of three signatures filling Measure A and filled a suit against the City of Half Moon Bay when they didn’t timely move it to the ballot. A friend of mine, Darel Bergland, also filled suit for inadequacy of the “City General Plan”.

There was a willy-nilly rush to approve VTMs by the “City Council of 1990”, creating legal “ticking time bombs” for the future, before the approval of Measure A in 1991 by seventy-something percent of the electorate! They wanted them approved, hence exempt, of the timing of Measure A.

Steven, I have a pretty good memory of the events of that time. You wrote “I’ve lived here now for over 25 years” - funny, I don’t recall you being ANY part of the solution!

Dennis,
I remember the “City Council of 1990” approving a VTM to permit an identified habitat pond to be lined in concrete, chlorinated and a filter system -  a definition of a swimming pool for people not for an endanger species!

Steven,
The question of the wetlands / habitat areas - it is Federal and State Law! Get over it!

The probability of AB 1991, ZERO! I did offer a suggestion for alternative legislation.

At any rate, the land will be purchased for $18,000,000. I really don’t think the people will assess the blame as you wish - to those who tried to defuse the legal “ticking time bombs” - but to those who created the “time bomb” and then exploded it!

Ken Johnson

Anyway, back to trying to survive the Bush-Cheney Recession.

Hi Steve,

Sorry to hear of your less than enthusiastic concern for wetlands and endangered species. I do not think that that is the majority view shared by our community.

The problem here is that this decision is not limited to Beachwood. Not only will other developers use this “settlement” as a basis for their HMB claims but so will developers all across the State. This is much bigger than HMB.

How can any legislator or department head tollerate simply nullifying laws intended to protect the people and creatures under our jurisdiction from being ‘disked and plowed under”? Laws are passed with the intention of affecting the whole State? Why would an exemption for HMB be consistent with this purpose?

You suggest that it is the City Council that is causing suits to be filed. Not so! It is those who file those suits who force the City to have to respond. Some suits are justified but only a judge or jury will determine which are and which are not. I don’t think any of us would agree that the City should cave in to everyone who chooses, for whatever reason, to file a suit.

Dennis Paull

I try not to play the blame game.  In hind sight,  I think poor decisions were made a while ago and we are paying for it now.

What I find most frustrating about our beautiful community (and I truly love it here) is that nothing ever seems to get done.  Beachwood was a 20 year fight and so was Pacific Ridge. North Wavecrest and the new school were a 15 year battle.

North Wavecrest probably angers me the most cause my son was supossed to be the first graduate of the new middle school.  He’s now a junior in college.

Here we seem to fight over everything like water lines to traffic lights to the Burnham Strip.  Years and years of watching nothing happen except the fatening of the lawyers pocket.

And these years of spinning our wheels has also contributed to the revolving door at City Hall. Who wants to work here.  And I feel sorry for the people who try to do a good job as our elected officials.  Low pay and constant abuse.

Beachwood is an unattractive piece of land that probably wasn’t worth the fight and expense.  Easy to say in hindsight. I’m sure its got some sensitive weeds on it but it is still ugly and near McDonalds.

I’ve always been told that you have to carefully pick your battles.  Its also better to compramise than to fight everything to the end.  Its too bad we don’t practice that here.

This city has always been an easy target for developers with deep pockets who can bury it with never ending legal fees.  I would expect their will be less confrontation in the future if for nothing else that the City is tapped out financially. And one more lawsuit will put the last nail in the City’s coffin and coffers.

Just because wetlands may exist close to existing development does not mean they deserve less protection than any other wetlands.

Over 90 percent of California’s coastal wetlands have been destroyed. Those that remain are increasingly near the borders of exisiting development, which keeps pushing relentlessly into all available open space.

Realtor Steve Hyman’s idea would be to protect only those wetlands where no houses (or McDonald’s) are nearby.

But then when people try to protect those wetlands say, like in Wavecrest, they are accused of stopping construction of a new middle school for his son.

In the year 2000, a Council that was split between 3 slow-growth members (Taylor, Ruddock & Coleman) and 2 pro-growth members (Donovan & Patridge) voted 5 to 0 – that’s 5 to 0 or unanimous - in support of the denial recommendation presented to them by their generally pro-growth staff - the City Manager (King), the City Attorney (Truxaw), and the Planning Director (Curtis).

Why? Because:

1.) both the staff and the Council believed the Law required them to do so when the developer refused to accept any redrawing of the map (which had never received final approval by the Coastal Commission) that would have reduced the quantity of lots by recognizing the wetlands. The developer demanded an up or down on the full quantity.

2.) the developer’s claim that the City caused one of the many wetlands by not maintaining an unpermitted, unrecorded, unreported ditch outside the City’s easement that was dug in 1984 - yes, 1984 - was neither credible nor a legally sustainable finding that could have allowed the legal filling of that particular wetland under California law. In other words, the City didn’t have the right to fill it even if it wanted to.

3.) the City staff coordinated their analysis with the California Coastal Commission staff in order to be consistent with that agency’s processes but did not push the legal limits at all. City staff’s proposal would have reduced the number of lots by roughly half. When the Coastal Commission itself heard the project on appeal in September, 2001, the number of lots was reduced by roughly three quarters, to 19 lots.

        ***

Hyman: “North Wavecrest and the new school were a 15 year battle.”

Needless to say, the solution to siting the new school was available from day one.

Both Jonathan Lundell and Steve Hyman are somewhat off on their facts.

It was WAVECREST VILLAGE that was a ten year battle in trying to site the new middle school…not fifteen years.

North Wavecrest was the fifteen plus year battle that was settled in the mid-nineties. Measure I defeated the NORTH WAVECREST referendum by greater than 60%.

For everyone’s information, NORTH WAVECREST has been a battle that had been going on for nearly three generations until POST purchased most of the buildable NORTH WAVECREST land last year

The HMB Review in January, 1947, said that if the Wavecrest developers could get the necessary water connections, it would be built by December1947.

Steve says:

I’ve always been told that you have to carefully pick your battles.  Its also better to compramise than to fight everything to the end.  Its too bad we don’t practice that here.

I’ve always been told that you don’t compromise on the law. That’s what the city is proposing to do: allow Chop Keenan to ignore state laws in exchange for money.

I think its great when you can stand on principles.  You also have to be able to back it up with your wallet.

Assuming the new law isn’t passed,  the City will be paying $23 million ($18 million settlement and $5 million for lawyers) for a piece of dirt that’s actually worth a fraction of that.

And they will almost bankrupt themselves paying off the debt.  There probably won’t be another lawsuit like this again because the City won’t have the resources to wage another battle.  They’ll be forced to fold under the crushing weight of the next legal assault.

Is Beachwood and the beautiful wetlands they have really worth $23 million to the community?  I don’t think so.

Steven,

Please support your statement: “$5 million for lawyers”; in “Assuming the new law isn’t passed, the City will be paying $23 million ($18 million settlement and $5 million for lawyers) for a piece of dirt that’s actually worth a fraction of that.”

I may have missed it but:
A quick ‘drive by’ of the agreement:

P E(7) No legal fees due to Keenan

OTOH, if your desired course is followed:
P B(3):
The City (us) will bear ALL: legal costs, settlements and judgments; brought by those with truly deep pockets: the State of California, the US Government, and litigants DOES 1 - ~

You recommend the City (us) take on an anticipated series of suits of unlimited unknown cost!

Ken Johnson

Ken,

The $5 million was for money paid out to defend the case to the previous attorneys.

I think it’s time to be specific, Steve. Walker’s decision was that City staff created the wetlands by actions taken in 1984.
So, why don’t you tell us what the City Council was supposed to do differently in 2000 considering that the Law didn’t give them the right to fill those wetlands even if they agreed that the City caused them?

Here’s the other thing. Where did that figure of $18 million come from Steve? It came from our own four City Council members after Keenan whispered it into their eagerly awaiting ears.

Basically, these four are trying to blackmail the entire state of California into giving their buddy Keenan the sweetheart deal of a lifetime.

Steven,

Thank you for correcting your prior statement! Significantly different from “will be paying” to ‘has already paid’. The difference between “paying $23 million” and paying $18 million—see, I all ready saved the Public $5 million in future payments for this absurd agreement. <grin>

Ken Johnson

Steven,

Forgot to mention the $15,000,000 to $18,000,000 already squander by you, the CUSD Board (past and present), et al on waiting on the Wavecrest site for a middle school. Weren’t you also one of those who opposed the “Build It Now” ballot measure which would have saved us MILLIONS?

As Jonathan Lundell mentioned above, the correct solution was available: “the solution to siting the new school was available from day one.” Jonathan was right and would have saved the Public MILLIONS OF DOLLARS!

I suppose you are going to support the upcoming “recommendation” to sell off the current School District Office site, maybe one Elementary School Site and other property for residential development to cover the loss in the School District Capital Fund!

My goal is to limit the Public loss, due to elected officials bad decisions and their supporters.

Ken Johnson

Ken,

Not that it matters but I thought it would have been cheaper but probably more complicated to rebuild Cunha on its current site since the School District already owned the land.

I think the argument at that time was the school needed a bigger parcel 25 acres versus 17 or so for the current one.

My point was that so many projects here take sooo long.  The bond measure was approved in the late 1990’s and we just broke ground last year.

Steven,

I agree about the frustration from things that “take sooo long” here. In 1978, I proposed a “Coastal Trail” so the kids could safely bike along the coast from the north to the southern borders of the town and between neighbourhoods. It is still not complete.

As to the re-build at the current Cunha site, there was a discussion about parcel sizes to try and kill the current Cunha site.

But the Cunha site was killed by CUSD Board Member Jolanda Schreurs before she was elected. She claimed that the Bond Money couldn’t be used at the Cunha site because “it wasn’t new”. The current efforts to rebuild at the Cunha site has proved, once again, that she was wrong on that and so many other things. But it did get her the support she wanted to get elected after a previous failure - and it only cost all the previously mentioned squandered millions of dollars of Public Money and the inability of all our kids to have a decent school facility for all those so many years so she could personally get elected!

Ken Johnson

It doesn’t always have to take a long time to get a project approved. The Carnoustie development at Ocean Colony and Cameron Palmer’s Birds of Paradise RV park—both on the west side of highway 1—sailed through the process with general approval from both the pro-development and slow-growth sides of the aisle.

Thanks Barry. And maybe bring it back to topic - maybe. AB 1991 still sits as originally submitted back in February. A good rumor is that the legislative analyst had to be ambulanced to hospital - something about laughing so hard that ribs were broken and chanting ‘you want to do WHAT!’

Ken Johnson